David Lazarus manages to prompt one of the great moments in bank public relations today, which would almost be funny if it wasn’t so infuriating. He’s telling the story of Mike and Ellen Kahara, who signed up for a HAMP mortgage-modification program through their lender, Wells Fargo. They made all their HAMP payments in full for the three-month trial period, and then continued to make payments as Wells dawdled over whether or not to make the loan-mod permanent.
This is the most depressing poll you’re likely to see this electoral season, and it’s not even political. StrategyOne decided that ordinary Americans can’t possibly be worse economic forecasters than economists, so they asked whether we’re going to have a double dip. 65 percent said yes, we are. And the rest of the answers are entirely consistent with that: 48 percent of Americans think that our best days are behind us. 71 percent think that “America is fundamentally broken and not working”. 79 percent are planning to spend less money at Christmas this year than they did last year:
The new Basel III capital ratios are going to be announced this weekend, and the banks are going to complain about how much the new ratios are going to raise lending costs and hurt economic growth. The BIS, of course, has taken these complaints seriously, and has released two monster reports calculating exactly what the impact of higher capital standards will be.
On October 15, 2007, Citigroup CFO Gary Crittenden lied to investors and analysts listening to the bank’s quarterly earnings call. He said that Citi’s subprime exposure had fallen to $13 billion — but that wasn’t true. In fact, it was more like $53 billion, once various super-senior tranches and liquidity puts were included. He knew all about those risks, he didn’t mention them, and as a result he has agreed to pay a $100,000 fine.
Robert Peston provides the latest piece of the Basel III puzzle, adding to last night’s report from Australia: while the Tier 1 capital ratio looks set to be 8%, the core Tier 1 capital ratio — the bit which is hardest to game, and which is basically just pure equity — seems to be 7%. That number seems to be made up of a base minimum of 4%, plus a 3% conservation buffer.